Did AI associated share price outperform other stocks, especially since the advent of ChatGPT?

Abstract

In this thesis, we will use quantitative analysis to research whether AI-associated share prices outperformed other stocks, especially after the advent of ChatGPT. In the essay, we screened 34 AI-related stocks and calculated their returns before and after the release of ChatGPT and compared their return data with those of indices such as the S&P 500, Nasdaq and Dow Jones. The essay evaluates in detail the differences in performance of AI-related stocks and market indices over two different time periods (pre-and post-ChatGPT) through Wilcoxon/Mann-Whitney tests and descriptive statistics and tests. The findings show that prior to the release of ChatGPT, there was no significant difference between AI-related stock returns and market index returns, with some AI stocks outperforming market index returns. However, after the release of ChatGPT, AI-related stock returns significantly outperformed the benchmark, reflecting increased investor enthusiasm and market optimism for AI-related companies. This shift suggests that the launch of ChatGPT has stimulated investor enthusiasm for AI technology and inflated valuations of related companies, which is consistent with the narrative of AI as a transformative innovation. The study concludes that the advent of ChatGPT was a turning point that enhanced the attractiveness of AI-related stocks within the market and generated abnormal returns. These results emphasize the impact of the launch of ChatGPT on investors, and also hint at the transformative potential and speculative risks of the AI space. For investors, these results highlight the value of an investment strategy that allocates resources to AI-related stocks following the launch of ChatGPT, while investors should also keep a close eye on volatility and potential asset bubbles.